Is Input services available for units under SSI Exemptions

[ravichandran maraiyan]

We are one of the units registered under Excise Duty and Service tax and availing SSI exemptions for manufacturing. We are also providing services like erection, commissioning and installations and charging service tax. Shall we eligible for taking Input service credit for set-off against service tax payment?

[YAGAY and SUN]

Dear Ravichandran,

You can avail the CENVAT credit as per the provisions mentioned in the Rule 2 (l) of the CENVAT credit Rules, 2004 and it can be only used for setting off the service tax liabilities. This cannot be used for setting off the Central Excise Liabilities.

Regards,

Sameer Malhotra - Consultants

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Mahir S]

Sir,

service tax payments made under reverse charge mechanism/partial charge mechanism charge are eligible for taking input service credit and for utilization towards service tax payments.

AI Summary

Input service credit availability: units availing SSI exemptions may use CENVAT credit to offset service tax liabilities.
Units availing SSI exemptions may claim CENVAT credit for input services under Rule 2(l) of the CENVAT Credit Rules, 2004, and such credit may be used only to set off service tax liabilities, not central excise liabilities. Payments made under the reverse charge or partial charge mechanisms qualify as input services and are eligible for input service credit usable for service tax payments.